Nomura Securities Maintains a 'Buy' on E*TRADE (ETFC); Q4 Review
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Price: $49.26 --0%
Rating Summary:
11 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
11 Buy, 13 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Nomura Securities maintains a 'Buy' on E*TRADE (NASDAQ: ETFC) price target of $10.00.
Analyst, Keith Murray, said, "It was a messy miss, with several noisy items related to credit and expenses which we think netted to a drag of about $0.10. Revenues were light (-6% q/q and -8% y/y), as the NIM declined 15bp sequentially and trading revenue was soft (DARTs -15% q/q). Given the recent run in the stock (+18% YTD vs. +5% for the S&P 500), we think the disappointing headline number and management’s reduced NIM guidance (now below 250bp average for 2012) will lead to a near-term pull-back in the stock. However, we think the improving E*TRADE story remains intact as core provision expense declined $11mm q/q, the loan book shrunk $664mm, net new brokerage assets were $1.7bn, the account attrition rate declined to 10%, and management guided to lower core expenses in 2012. We reduced our 2012E EPS to $0.60 from $0.73. However, in 2013 we have baked in a better trading backdrop, lower provision, and a positive $0.10 EPS benefit, as we think E*TRADE will be able to refinance its 12 ½% springing lien notes by the end of 2012. While the E*TRADE story remains complicated, the stock remains our top pick among the online brokers as it trades at less than 10x our 2013 estimate."
For an analyst ratings summary and ratings history on E*TRADE click here. For more ratings news on E*TRADE click here.
Shares of E*TRADE closed at $9.36 yesterday.
Analyst, Keith Murray, said, "It was a messy miss, with several noisy items related to credit and expenses which we think netted to a drag of about $0.10. Revenues were light (-6% q/q and -8% y/y), as the NIM declined 15bp sequentially and trading revenue was soft (DARTs -15% q/q). Given the recent run in the stock (+18% YTD vs. +5% for the S&P 500), we think the disappointing headline number and management’s reduced NIM guidance (now below 250bp average for 2012) will lead to a near-term pull-back in the stock. However, we think the improving E*TRADE story remains intact as core provision expense declined $11mm q/q, the loan book shrunk $664mm, net new brokerage assets were $1.7bn, the account attrition rate declined to 10%, and management guided to lower core expenses in 2012. We reduced our 2012E EPS to $0.60 from $0.73. However, in 2013 we have baked in a better trading backdrop, lower provision, and a positive $0.10 EPS benefit, as we think E*TRADE will be able to refinance its 12 ½% springing lien notes by the end of 2012. While the E*TRADE story remains complicated, the stock remains our top pick among the online brokers as it trades at less than 10x our 2013 estimate."
For an analyst ratings summary and ratings history on E*TRADE click here. For more ratings news on E*TRADE click here.
Shares of E*TRADE closed at $9.36 yesterday.
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